On November 4, Sequoia posted a memo on X called "The Sequoia of Tomorrow."
In one morning, the firm took apart a good part of what it had built over twenty years:
About $10B in new funds
The London office closed after five years
The Arc accelerator and the Scouts program shut down
Early stage and growth merged into one team, the partnership flattened and the Monday partner meeting dropped
Who explained it?
Pat Grady. He backed ServiceNow, Snowflake, Zoom and HubSpot, and his current companies include OpenAI, Harvey and OpenEvidence. Since late 2025 he runs the firm with Alfred Lin as co-steward.
The same afternoon he went on stage at a WSJ event. He said bigger is absolutely not better in venture, that Sequoia has shown its LPs a slide of a bubble three years in a row, and named the companies where he sees the next wave of AI giants.
📚 In this newsletter, I break down what Pat Grady said about the new Sequoia, the AI bubble and where the next giants will come from, with clips from the interview. At the end you'll find Sequoia's AI Ascent deck!
Inside you will find:
Why Sequoia Is Getting Smaller in the Middle of the AI Boom
See how $25B of exits, the power law and a single match explain the new Sequoia.Why Sequoia Covers Europe Better Without a London Office
Find out why European founders kept asking for the partners in California.How Sequoia Got Rid of Bosses
Learn how China, India and a hedge fund turned a partnership into a company, and how they reset it.Why Sequoia Has Shown Its LPs a Bubble Slide Three Years in a Row
See why Grady calls it a bubble and still expects the right companies to surprise to the upside.The Diffusion Gap: Where Sequoia Is Looking for the Next AI Giants
Find out which companies are turning AI into real ROI, from Harvey to OpenEvidence.The Two Ways an AI Startup Becomes a Freestanding Giant
Learn the framework Grady borrows from Jeff Bezos to judge which AI companies will last.The Startups Sequoia Thinks Will Make AI 100x Cheaper
See the two bets on new architectures, including a lab that skips pre-training.Why Most AI Tokens Will Come From Open Models
Find out how companies pick a model and why more of them want to own their intelligence.Sequoia's AI Ascent Deck
The 32 slides Sequoia presented at AI Ascent, its annual AI event, on where the AI wave is going.
🏎️ 👀 BREAKING: Ruben Dominguez and I are turning our GR Angel polos into Formula 1-style sponsor kits.
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1. Why Sequoia Is Getting Smaller in the Middle of the AI Boom
Sequoia is 54 years old. Grady points out that very few venture firms stay relevant that long, because missing one big technology shift or one generational handover is usually enough to wipe a firm out.
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